Cheating by building contractor

Hello Advocate
My house construction contractor has cheated us by signing the agreement and he has completed the partial work by taking advance money and later he comes and asks for more money without completing the work and stopping the work for 10 working days stating that we should pay him more money for the material he has brought. He is also not giving us the bills or receipts for material he has brought for house construction but still claiming for the money.
He is now threatening us that if we do not pay him for material he has brought for construction he will not allow us to engage any other contractor for the further work. He is also not continuing the work and asking for more money. This is leading to loss as the material lying in the site is going waste such as sand and cement due to rains.
When we asked him to refer to the agreement as we have made the payments as per agreement, he is now saying he cannot read english and he will ask some other engineer to read the agreement for him. This contractor has already signed agreement in the month of May 2015 and after completing partial work he is saying he does not know how to read and write english and he wants more money then what is mentioned and agreed upon in the agreement.
Can I file this case as IPC 420 for cheating us with false claims, signing the agreement with payment terms and conditions and now asking for more money for work not completed & now saying he does not know english.
He has also cheated in the material as some of the material we had to bring and give it to him though the contract is a labour with material contract.
Can we also claim for damages caused to the material loaded in the site and for work stopped past 10 days?
Please advise on what is the further legal action that I can take
Regards
Sheela

Asked 1 year ago in Property Law from Bangalore, Karnataka

Religion: Hindu

In the agreement we have the clause mentioned that if the contractor stops the work for 48 hours due to unavailability of material or labor, owner of the house can give notice to terminate the contract and also claim for any due compensation. Can I go ahead and file policy compliant for 420 cheating case? How can I claim for the delay dues and wastage of material caused due to not working and stopping of work for 10 working days.

Asked 1 year ago

1. according to sec 37/39 of the contract act, builder is bound to complete his work then he can full payment. you should send him a legal notice to completion of work.
2. when contract is signed, party to the contract can't take this defence that he can't read the terms of contract. In excelware ltd vs spincton it is held by the court that when information is given in the contract at or before the signing of contract then party to the contract can't say that contract is not binding on him because language is unknown to him. this view is reaffirm by the supreme court of india in Ashish Goel case.
3. So don't file criminal case at this stage, first you send a legal notice and wait for his reply. If he gives false bills then you have grond to file criminal case for cheating, you can also file suit for compensation and completion of work.

In Bharat Fire & General Insurance ... vs Parameshwari Prasad Gupta it is held by the supreme court of India that when language of the contract is clear then party to the contract can't say that he was unaware it is not acceptable in the cases which is general tredition or natural course of the business.
In your case it is general course of business to complete the work before full payment. contractor is bound to perform his duty first.

Hello Advocate,
We want to lodge police compliant as he is threatening that he will not allow us to get work done from other contractors. Since he has cheated us big time, we dont want to continue with this contractor as it will impact the work quality also if we continue with him moving forward. So how to now take action on him as he has not given us the bills, he is not working since 10 days and asking for more money for work done instead he should pay us back the money as we have paid him more money then what is stated in the agreement but he has not completed the work. Considering this situation, can we go ahead and file a police compliant for threatening us and cheating us?
Please clarify
Regards
Sheela

Asked 1 year ago

1) it is necessary to peruse agreement signed by you with the contractor
2) contractor is bound to furnish bills of material bought
3) it is only after physical verification of material with the material bought should you make further payments
4)( does your contract provide for arbitration clause?
5)in case off failure to complete the work you cna terminate the contract and seek damages for loss caused to you

1) you can file cheating case if contractor has defrauded you
2) complaint may take some years to be disposed of
3) suit for damages also take some years to be disposed of
4) you can issue contractor legal notice to complete the work as stipulated in the contract failing which you would have no option but to terminate the contract

Hello Advocate,
If we terminate the contract, the contractor is asking for making payment for work done as he is claiming that the work he has done and the material he has brought has caused him to spend more money then what is stated in the agreement. He does not have bills for sand he has procured and he does not have pakka bills for cement and other construction material he has purchased. We have requested him for bills more then 3-times but he is not willing to give us the bills. He is saying first we need to pay his extra money then he will give the bills.
So in this situation we are unable to get work done from other contractors as he is not allowing us to get work done from other contractors. He also threatened us that he will ensure we cannot get it done from others.
So just by giving termination notice, will it help us in continuing work with other contractor?
We have lodged policy compliant today and it was registered in the near by police station for threatening us on the phone and at our house. The contractor is now saying to the police that he will bring stay order to get the work stopped in between. As per the agreement we have signed with the contractor there is no such clause to bring the stay order. Can the contractor get the stay order and stop our work in between?
Please clarify.
Regards
Sheela

Asked 1 year ago

Hi, first issue a legal notice to the contractor and ask him to do the finish the work if he fail to comply the notice then you can terminate the contract and file a suit for damages.
2. Simultaneously you can also lodge a police complaint.

Hello Advocate Ajay,
We have already paid more money for the work done. We have paid 20,000/- extra money however he could not complete the work for waterproofing and slab muddy work despite that he has taken the money.
Do we need to send the legal notice with civil engineer certificate and photographs or we need to keep it just for our records?
If in the agreement it is not mentioned for any kind of stay order and if we have already terminated the contract due to unavailability of labor and stopping of work for 48 hours as per agreement, can contractor sill bring a stay order from the court?
Please clarify.

Asked 1 year ago

1) no court will grant any stay order if contractor had refused to submit bills in reject of material purchased by him
2) your defence should be that you are willing to pay for work done as per agreement . However on account of failure to complete work contract had been terminated after issue of legal notice
3) take photographs and video recording of the work done on site till date
4) appoint a civil engineer to certify amount of work done by contractor

1) once you have terminated contract no need for issue of legal notice for termination
2) you must keep photographs , civil engineer certificate to justify why you terminated contract
3) court will not grant any stay unless strong case is made out by contractor

1. He has not yeat cheated you. He has just claimed more money than what he should get as per the agreement,
2. File a complaint case before the local District Consumer Dispute Redressal Forum alleging deficiency in service and unfair business practice claiming direction upon the contractor to immediately start construction and finish within a fixed period, pay damage for the delay and cost,
3. Also pray for leave to engage another contractor in case he refuses to stcrt his construction within the stipulated period,
4. File a police complaint for his stopping construction and putting you into misery and also file a petition under order 39 rule 1 & 2 praying for injunction upon the contractor restraining him in entering into your premises.

1. Yes. You can issue him the said notice as per the agreement,
2. Please note that he has not yet cheated you by claiming extra amount since you have not yet paid him what he asked from you illegally,
3. However, you can sue him for cheating for not paying you the compensation you asked for as per the agreement,
4.You can also file a complaint for his treatening you and stopping you from engaging any other contractor to complete the work which he is refusing to complete.

1. Send him the termination of contract letter,
2. Ask him to submit bill strictly as per the agreement after deducting the cost of the material supplied by you,
3. Lodge a police complaint for his treatening you that he will resist the new contractor to work for for at your site,
4. Bring a stay order against his presence as advised in my earlier post.

1. Pay him the money what you are supposed to pay him as per the agreement,
2. You must preserve all evidence in support of the ground for cancelling the contract,
3. It is not mentioned in any contract that one party will not go to court and bring stay order, if he is agrieved. It is his civil right.

1. You can mention the extract of the report of the Civil Engineer and need not send any photograph,
2. As mentioned in my earlier post, every body has the right to approach court of law and pray for stay order and it can not be mentioned in any agreement that the parties are restrained from going to court. Such agreement will then be treated as invalid.

Besides police complaint, before he is approaching the court, you may secure the evidence for the incomplete and sub-standard work done by the contractor so far vide a certificate from a qualified civil engineer along with the photographs, issue him a legal notice stating the contract stands terminated quoting the clause for termination and file an injunction suit against him in the jurisdictional civil court seeking the relief of restraining him from interfering with the continuation of construction work to be carried out through some other contractor and also can seek recovery of compensation money for the loss he caused due to the breach of contract and discontinuing the construction work half way.

1. Once you enter into an agreement it is sacrosanct and inviolate. Since the contractor has violated the agreement you can file a lawsuit to compel him to honour the agreement or return the amount already paid to him along with damages for dishonouring the agreement.
2. The court orders may also be sought to direct him to furnish the bills for the material which he has claimed to have purchased.
3. You can also launch his prosecution for cheating as he has not honoured the agreement.
4. Before going to court you may issue him a lawyer's notice through your lawyer to send a warning to him.

1. You are at liberty to cancel the agreement if he has violated it.
2. Cancellation of the agreement will not impair your legal right to prosecute him for cheating and also claim the refund of the money paid to him and damages for violation.

1. You are free to engage any other contractor. However, this can be done only after you cancel the agreement you entered into with him.
2. If he impedes the functioning of any other contractor you can lodge a police complaint against him and also obtain a restraint order from the court.

1. Once you cancel the agreement the contractor will be at liberty to go to court to recover from you the money, if any, spent on purchasing the construction material. The court will give you an opportunity to rebut his case in defence. However, unless there is a stay order issued by the court the new contractor can commence and continue his work.
2. Before he goes to court to seek a stay order you may approach the court to obtain the necessary orders against him as this may serve your interests.
3. The right to seek a stay order against the acts of another person is an indefeasible legal right. It does not require a mention in the agreement.

1. The notice to be sent by your lawyer does not have to be supported with the certificate from any civil engineer or photographs of the site.
2. The contractor can got o court to seek a stay order, which you can oppose.

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